WASHINGTON, D.C., Sept. 27, -- Mr. Jemal-ud-din Kassum, Vice President of the International Finance Corporation (IFC), will lead a delegation of IFC executives to Indonesia from 28 to 30 September, 1995. The purpose of the visit is to consult with government and industry leaders on initiatives to encourage private sector development and to discuss IFC's ongoing activities in Indonesia. During their visit, the IFC delegation will meet senior members of the Indonesian Government, as well as bankers, and business representatives. IFC's Board has just approved a new investment in the P.T. Gleneagles Hospital Corporation, a joint venture between Lippo Land and Gleneagles Hospital of Singapore. This is IFC's first investment in Indonesia's health care sector, which has traditionally been the domain of the public sector, and is expected to provide improved hospital services. In keeping with its objective to support small and medium enterprises, IFC recently approved a long term loan for P.T. Panin Overseas Finance,
a multi-finance/leasing institution affiliated with Panin Bank and where IFC has a strategic shareholding. IFC has strongly supported Indonesia's structural shift towards a diverse, competitive, and globalized economy. The Corporation has played a role through the formation of joint ventures with international partners and the transformation of local family-owned companies into publicly-listed and professionally-managed corporations with access to local and international capital markets. Commenting on his visit, Mr. Kassum said, "With a growth rate of 7 percent a year, Indonesia presents excellent prospects for the private sector. IFC can continue to make a significant contribution in financial institution building and capital markets development, in supporting the expansion of second-tier companies, and in mobilizing funds for mega projects. Our role will complement, rather than compete with, private capital and we will seek the views of Government officials and business representatives on how best to pursue
these activities." (More) IFC Press Release No. 96/33 Page 2 of 2 Accompanying Mr. Kassum will be Mr. Peter Cook, who was recently appointed Director of IFC's Asia Department; Mr. Harold Rosen, Divisional Manager, Southeast Asia at IFC; and Mr. Rashad Kaldany, Manager of IFC's Asian Capital Markets division. Mr. Antonio David, IFC's Regional Representative in Jakarta, will be joining the delegation. IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries. Note to Editors: a Backgrounder on IFC's activities in Indonesia is attached. (30) BACKGROUNDER OF IFC'S ACTIVITIES IN INDONESIA IFC's Role: Indonesia presents IFC with a challenging environment and the Corporation has played a significant role in assisting a wide range of Indonesian enterprises. IFC's activities include long-term fund mobilization for large projects; improving competitiveness; preparing for a more open economic, trade and investment regi
me; helping mid-size companies get ready for public listing as well as for approaching international capital markets; and in providing confidence to partners in local and foreign joint ventures. IFC has also helped to alleviate perceived political risk by mobilizing long term funding -- not otherwise available in Indonesia -- from commercial banks. IFC's Strategy and Objectives: As the economic and business environment in Indonesia becomes more competitive, IFC will continue to help companies adapt and prosper. The Corporation will assist privately-held companies which are interested in making the transition to become world-class, competitive producers with external financing and public shareholders. From a sectoral perspective, IFC will strive for a balanced program, supporting both resource-based investments in minerals and agriculture as well as export-oriented and domestically-oriented manufacturing firms. IFC also aims to broaden the role of the private sector into sectors previously controlled by the st
ate, particularly in infrastructure and privatization. In capital markets, IFC will focus on institution building and assist local financial institutions in sourcing long term finance in an effort to develop local long term debt markets. Financial Year 1995: While IFC's focus is more on role than volume, the Corporation achieved a record financial assistance to Indonesia in FY 1995 of US$385 million, comprising $158 million of IFC long term loans, US$34 million of IFC equity and US$193 million of long-term loan syndications. The IFC program included : general manufacturing (Indorama, Bakrie Pipes, Kia Serpih Mas, and South Pacific Viscose); petrochemicals (Bakrie Kasei PTA II and BKC Pet); tourism (Hotel Santika); and the financial sector (Citimas ABS, Bunas Finance, and Panin Overseas Finance). The Citimas Asset-backed Securities Institution, the first in Indonesia -- possibly in Asia -- creates a new source of term financing without further leveraging. In FY 1996, IFC will additionally focus on agribusiness
projects. IFC's Portfolio: IFC's current portfolio in Indonesia includes about 35 investments with over US$470 million committed for IFC's own account and a further US$464 million committed for the account of loan participants. IFC's held portfolio is distributed sector-wise as follows: 53.9% in general manufacturing, 9.1% in capital markets, 4.6% in agribusiness, 3.4% in infrastructure, 18.4% in petrochemicals, and 10.6% in tourism.
